Question

Profits of the last three years were Rs. 6,000, Rs. 13,000 and Rs. 8,000 respectively. Goodwill at two years' purchase of the average net profit will be.

• A. Rs. 27,000
• B. Rs. 81,000
• C. Rs. 9,000
• D. Rs. 18,000

Hint:

Goodwill is calculated by multiplying the average net profit by the number of years' purchase.

Answer 1

The Correct Option is A

Step 1: Calculate the average net profit.
Average net profit = \(\frac{6000 + 13000 + 8000}{3} = \frac{27000}{3} = 9,000\)
Step 2: Calculate goodwill.
Goodwill at two years' purchase = \( 2 \times 9,000 = 18,000 \)
Step 3: Conclusion.
Thus, the correct answer is (A) Rs. 27,000. Final Answer: \[ \boxed{\text{Rs. 27,000}} \]